IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM (Assessment Year: 2017-18)

Krishna Mohan Prop-M/s Maa Ambey Traders, ACIT, Circle-14, Patna Maurari Complex, Karbigahiya, Vs. Patna, Bihar patna-800001, Bihar (Appellant) (

Respondent)

PAN No. AHUPM5205C Assessee by : Shri Manish Rastogi, AR Revenue by : Shri Md. AH Chowdhary, DR Date of hearing: 27.11.2025 Date of pronouncement: 09.12.2025

O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 03.09.2025 for the AY 2017-18.

2. The only issue raised in the various grounds of appeal is against the confirmation of addition of ₹5,63,35,000/- by the learned CIT (A) as made by the learned AO on account of cash deposited in the bank during the demonetization period. The assessee has also challenged the order of learned CIT (A) on the ground that the admission of additional under Rule 46A without referring the same to the learned AO.

2.1. The facts in brief are that the assessee filed the return of income on 30.11.2017, declaring total income of ₹29,99,960/-. The case of the assessee was selected for scrutiny under CASS on the ground of huge cash deposit during demonization period. Accordingly, notice u/s 143(2) and 142(1) of the Act along with questionnaire were issued, which were complied with by the assessee by filing the copies of ITR, audited report, computation of total income, bank accounts and detail of cash deposits, etc. The assessee submitted the following details. The learned AO found that during demonetization period though the assessee deposited ₹5,63,05,000/- however, only 17,000/- were deposited in SBN. The learned AO also noted that there was steep rice in the cash deposits during the demonetization period which was almost 25 times rise in the turnover of the assessee from ₹1,18,63,219/-, in order to A.Y. 2016-17 to ₹25,44,40,568/- in A.Y. 2017-18. Finally, the learned AO treated ₹5,63,35,000/- as unexplained money u/s 69A of the Act and added the same to the income of the assessee in the assessment framed u/s 143(3) of the Act dated 23.12.2019.

2.2. In the appellate proceedings, the learned CIT (A) also dismissed the appeal of the assessee after taking into consideration the reply/ submission of the assessee. The learned CIT (A) while upholding the order of the learned AO even held that the assessee has not furnish any documents/ proof to corroborate huge cash deposited during demonetization period.

2.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee is engaged in the business of wholesale trading of Tobacco and Chewing Begel Nuts (pan masala) under the name and style of M/s Maa Ambay Traders.

During the demonetization period, the assessee deposited a sum of ₹5,63,35,000/- as cash in the various bank accounts including ₹17,00,000/- in SBN Notes. We note that this is undisputed that the said cash represented the cash sales made by the assessee and duly shown in the books of account which were available before the authorities below. The books of account of the assessee were audited as the total turnover of the assessee during the year was ₹25,44,14,568/-. The assessee offered the income to tax as per the books of account, which was not disputed by the learned AO. In other words the sales made by the assessee during this period, was also not doubted and disputed by the authorities below. We also note that the increase in turnover of the assessee was attributed to the ban/prohibition being lifted on sale of tobacco products with effect from 19.07.2016 pursuant to Patna High Court direction, which was earlier imposed on 7.11.2014 by the State Govt. We further note that the learned CIT (A) dismissed the appeal on the ground that the assessee has furnished the additional evidences under Rule 46A which were not maintainab